It has now been just short of a year since Ciena (NASDAQ:CIEN, news, filings) acquired Nortel's MEN business out of bankruptcy, which is time enough to expect to see signs of either success or failure in the aggressive purchase. With their first fiscal quarter 2011 results, it does seem as if things are still going pretty well in Maryland. Ciena reported revenues of $433.3M, which topped its own guidance of $410-430M and easily outdistanced analyst estimates that were just above the midpoint of that guidance. That 4% sequential growth follows a 7% sequential surge they posted back in December. Adjusted loss per share of $0.14 was also slightly better than anticipated, and adjusted gross margins were 41.8% - inline with guidance.
They are still spending heavily on integration though, racking up $24.2M in costs on that front. And some of that revenue outperformance seems to have come as a side effect of back-office integration activity, which accelerated some revenue into the first quarter and will apparently cause some minor supply chain constraints in Q2. Revenue guidance of $415M-435M for Q2 therefore is on the low side. They didn't quantify the revenue acceleration (perhaps on the CC), but if were shifted from Q2 to Q1 because of it then everything might have matched up. But integrations are like that - the accounting and timing can get messy even when they are going well.
Having gotten this far without any major integration hiccups has been a big step, this year they just need to follow through. However, tatience isn't the market's best feature. The obvious questions will quickly become: when when profitability return and at what levels?
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